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Recently, the Bulgarian National Bank (“BNB”) approved amendments to BNB Ordinance No. 16 on the licensing of payment institutions, e-money institutions and operators of payment systems. The amendments were published in the State Gazette on 2 September 2016 and came in force three days after publication.

According to the amendments, payment institutions and e-money institutions licensed in other EU member states that operate in Bulgaria through a representative must establish a central contact point (“CCP”) if they meet either of the following criteria:

if the payment/e-money institution has over five representatives to perform its activity in Bulgaria; or

if the value of the performed payment services/e-money distributed in Bulgaria exceeds BGN 2 million (ca. EUR 1 million) or the equivalent in another currency.

Ordinance 16 does not specify a time period for which the set criteria apply – it is not clear if a CCP must be established at the time when either of the above criteria is met, for a calendar year or for any 12 month period, etc.

Qualifying payment/e-money institutions must assign communication and reporting obligations regarding the activity of their Bulgarian representatives to the CCP. The payment/e-money institution must inform the BNB of the name, seat and management address of the CCP; its unified identification code; the list of the persons managing and representing the CCP; contact details of the CCP and any amendments thereof.

Again, Ordinance 16 is silent about when to establish the CCP and notify the BNB of the above information.

Further, there are other gaps in information in Ordinance 16 which the BNB has to clarify, such as:

there is very limited information about the requirements of the CCP, we know only that it should be an entity established in Bulgaria. Presumably it could be the representative itself or any other entity assigned with the communication and reporting functions;

it is not clear what information should be provided to the BNB through the CCP. The wording of Ordinance 16 is very broad, it states that the CCP should provide information regarding the activity of the representative in Bulgaria but is silent about how often such information should be provided, the format for reporting, etc.;

there are no specific sanctions for non-compliance with the above requirements.

The requirement to set up a CCP will likely be related to the future implementation of the Revised EU Directive on Payment Services of 25 November 2015 (PSD2) and the EU Fourth Anti-Money Laundering Directive of 20 May 2015 in the Bulgarian legislation as these contain an option for member states to require payment/e-money institutions operating in their territories through agents or branches to set up a CCP. We expect the gaps and inconsistencies in Ordinance 16 to be clarified with the implementation of the above directives.

Other amendments to Ordinance 16 include:

additional information regarding the representatives and branches of payment/e-money institutions when applying for a license with the BNB. All pending applicants for a payment/e-money institution license should provide the BNB with information regarding their representatives/branches, if any within one month;

additional documents and information should be provided to the BNB if a payment/e-money institution licensed by BNB intents to perform activity through a branch or a representative in another member state;

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